The Philippines lags behind the majority of its international peers when it comes to unlocking the economic potential of its vast pool of human resources, based on a new global index by the Geneva-based World Economic Forum.
WEF’s inaugural Human Capital Index 2013 ranked the Philippines 66th out of 122 countries that were assessed by “measuring contributors and inhibitors to the development and deployment of a healthy, educated and able labor force.”
This new index aims to help countries make the right decisions when investing in the economic potential of their people. It measures countries’ ability to develop and deploy workers through four distinct pillars: education; health and wellness; workforce and employment; and enabling environments.
Switzerland topped the 122-country ranking, followed by Finland. Germany ranked sixth and the US debuted at 16th, WEF said in a press statement announcing the results of the study Tuesday night.
The index ranked Singapore third and was the best performer in Asia-Pacific, followed by Japan (15th), Malaysia (22nd) and Republic of Korea (23rd). China ranked highest among the BRICS (Brazil-Russia-India-China-South Africa) nations at 43rd.
The Philippines, for its part, is in the middle of the pack when looking only at countries within the Asia-Pacific region. It ranked lower than Southeast Asian neighbors Thailand (44th) and Indonesia (53rd) but stood in a better place than Vietnam (70th) and India (78th). The laggards in the region were Cambodia (96th), Bangladesh (110th) and Pakistan (112nd).
The 122 countries assessed in this index represented over 90 percent of the world’s population.
The report highlighted that a nation’s human capital endowment—productive skills and capacities—could be a more important determinant of long-term economic success than virtually any other resource. It also identified an urgent need for investment at the earliest stages, as well as later in life, to generate returns for individuals as well as an economy.
“The key for the future of any country and any institution lies in the skills and talent of its people,” said Klaus Schwab, WEF founder and executive chair. “In the future, human capital will be the most important kind of capital. Investing in people is not just a nice to have; it is imperative for growth, prosperity and progress.”
Saadia Zahidi, senior director and head of the Human Capital project at the WEF said: “Some countries face an aged or aging population, others face youth bulges, a few even face both. For some, this means confronting a major upcoming talent crunch, while for others it means developing mechanisms that allow it to realize their population’s potential rather than letting it develop into a burden. In this light, the Human Capital Index is a tool for understanding where countries stand today so that government and business can engage in workforce planning for the future.”
“The Philippines follows a similar profile to Indonesia with a 38th ranking on the workforce and employment pillar and 96th on health and wellness,” the report said, adding that the country garnered top scores for the education and health gender gap indicators as well as a strong 15th rank for economic participation. However, ranks below 100 on the wellbeing sub–pillar indicators pulled down the aggregate health and wellness scores.
The Philippines, Southeast Asia’s fastest-growing economy in the first semester with a growth rate of 6.6 percent, has a population base of 93.44 million, of which the median age is 22. Services constitute the biggest bulk of the domestic economy.
Meanwhile, Singapore’s strong performance was attributed to high workforce and employment score, which was second-highest in the world. It also scored highly in terms of education and enabling environment although less well in terms of health and wellness.